What is Digital Collections?
Agencies have now spent a year – or longer – implementing digital collections practices into their offices. To adapt to work from home requirements and prepare for Regulation F, many companies have begun using digital strategies to connect with consumers and resolve accounts.
So how do you define this practice? Digital collections is about upgrading and supplementing old business operations or adding brand new tools and strategies to your list. A few examples of digital collections include:
- Using text, email and other digital channels for outbound communication
- Providing digital inbound self service options
- Reducing manual inbound and outbound tasks for front line staff
Even before the pandemic, with the CFPB’s release of their new debt collection rule, agencies were already exploring digital upgrades to their collection systems.
SMS Text Messaging
Now, SMS text messaging is seeing more popularity. These two channels, along with already proven collection methods, will help many agencies capture payments from consumers they could never reach before.
Another channel many agencies are adopting is online chat. With the embarrassment that comes from an overdue bill, consumers may find it easier to settle accounts if they don’t have to speak on the phone.
Business Operations Post-Pandemic
Digital First or Digital Only?
Before the release of Regulation F, the old rules governing collections were outdated (to put it mildly). Professionals spent years hoping the Bureau’s updates would include the use of current and future technologies.
Does this mean that agencies are ready to ditch telephone collections and go all in on digital? It’s not likely anytime soon.
It’s true, consumers expect to interact with creditors, third party collectors, medical billing agents and others in AR the same way they communicate with any other business. However, the most important part of collection is reaching the largest number of consumers possible. The more types of communication and payment options you offer, the wider your range of responsive consumers will be.
Preferences are different based on consumer type or personal situation. Here are just a few of the reasons that make consumers choose specific options:
- Age - Older consumers tend to prefer telephone calls over text and email, younger consumers are more likely to prefer digital channels
- Financial situation - Those who need to ask for financial aid or to skip payments because of a financial situation may need to speak to a live agent in order to explain fully.
- Questions about debt - if a consumer has questions about why they owe the amount in question, some may prefer a phone call.
- Dispute of a debt - if a consumer knows they want to dispute a debt, they may decide on an online portal to avoid an agent.
- Embarrassment - People sometimes know they are late paying, and hope to resolve their bill without speaking to anyone. Online portals and other digital collection tools give them options.
Benefits of Digital Collections for Business Operations
Another trend that has been growing for several years – and has contributed to the popularity of digital collections – is the drive toward a better consumer experience. People want easier ways to fulfill their obligations, and many of the digital tools available offer just that.
A better consumer experience reduces complaints and escalated calls, can help to manage disputes and ensures higher close rates and better online reviews. Internally, there are even more benefits of taking your business operations digital.
Many agencies are already saving money and increasing collection numbers by offering self-service channels. Options like payment portals on your website empower consumers to reach out to you proactively on their time, often without the need for a staff member to intervene.
For these channels to work for you, though, make sure the software you choose is friction-free and provides the simplest payment experience possible. Otherwise, people may abandon payment or take up staff time raising complaints about a system that is intended to make life simpler.
Allowing people to help themselves boosts your revenue. Self-service opens the door for:
- people who are too embarrassed to speak to an agent
- those who know they owe but don’t have time for a phone call
- those who only have free time to pay bills outside of office hours
Capturing payments from these types of consumers is a powerful loss mitigation tactic. Most people are not happy about paying bills, especially if you’re a third party collecting on a delinquent account.
Making the payment process simple and friction-free (and something consumers can do without the help of an agent) reduces skipped payments, decreasing loss within your company.
Digital vs. Analog
It should be apparent by now that the best course of action in your business operations is to combine new collection tools, tactics and strategies with your already proven techniques. After all, the goal you are reaching for with consumers is to make paying bills accessible to everyone.
Rather than replacing existing frameworks with new technology, instead keep what’s working and improve on it. Your focus should be creating a customer-centric philosophy that helps you build credibility, decrease complaints and capture more payments than ever before.
Learn how our FLOW Technology can help your business operations thrive. PDCflow extended business office customer, Assistentcy LLC., recently shared their success story using FLOW. Discover how it helped them nearly double card payments, reduce outbound calls and increase trust with consumers.